It’s taken decades, but Labour has seen the light on Europe

By nature, inclination and history, Labour is the most powerfully anti-European of all our big political parties. Labour was viscerally opposed to membership of the Common Market, as the European Union was known for most of the post-war period. The majority of its MPs voted against British entry in 1972, and under Michael Foot’s leadership, 11 years later, the party fought a general election on a platform of outright withdrawal.

This posture only changed after a famous address by Jacques Delors to the Trades Union Congress in the autumn of 1988. In his speech, which can be understood in retrospect as a pivotal moment in modern British history, the president of the European Commission painstakingly set out to convince the delegates that the EU would help their members through changes to workplace regulation, employee benefits and working hours. Many were converted on the spot.

By an interesting coincidence, the Delors tour de force was delivered within days of Margaret Thatcher’s equally famous Bruges speech of September 1988, in which she sought to tame what she saw as the growing power of Europe. So by 1994, with the election of Tony Blair as Labour leader, the wheel had turned full circle. The Conservative Party – which signed us up to the Common Market under Edward Heath – had become sceptical. Meanwhile, Tony Blair loved to boast of his pro-European credentials, declaring that his mission as prime minister was to effect a historic rapprochement between Britain and Europe.

Speedily, the old guard of Labour Eurosceptics – Bryan Gould, Nigel Spearing, Tony Benn, Peter Shore – were eliminated or pensioned off. By the time that the so-called “Britain in Europe” campaign was launched at the turn of the century, not a single ranking Labour figure joined the Conservatives in the No camp. The European victory inside the party seemed complete.

This view, however, now needs urgent reassessment. The election of Ed Miliband seven months ago coincided with a shift of tone – and a series of extraordinary developments during the past two weeks has formalised a new and potent position.

First, Ed Balls struck home with his angry demand that Britain should limit its exposure to the bail-out of near-bankrupt Portugal. It is hard to over-emphasise the significance of this intervention, because it represented a definitive change in approach from within the highest ranks of the Labour Party. The shadow chancellor effectively repudiated Alistair Darling’s decision, made in the final days of the Labour government, that Britain should hand over the chequebook for a eurozone bail-out fund. This was itself a manifestation of the long-held New Labour doctrine that Britain should never act in defiance of the wishes of the European Union, no matter how great the cost to the British taxpayer. And it now looks certain that Britain will indeed pay a very high cost, amounting to many billions of pounds, for Darling’s recklessness and profligacy.

So Ed Balls has contemptuously humiliated the former Chancellor. But he has done more than that. By demanding that “the clear bulk of the financing should come from the eurozone”, Balls has also signalled that he is ditching New Labour’s long-term and very public strategy of co-operation with Europe. If George Osborne takes his advice and refuses to pay for the Portuguese, Britain will find itself in an ugly and bitter confrontation with other European countries. That is why the shadow chancellor’s intervention was so utterly electrifying.

Some believed that Ed Balls – who has long been known for privately holding Eurosceptic views – was acting on his own, possibly without authorisation from Ed Miliband. But on Wednesday, Douglas Alexander opened a second flank. The shadow foreign secretary is a more middle-of-the-road figure than Balls, but he carries almost as much weight in Miliband’s front-bench team. Furthermore, his attack, inflamed by the European Commission’s proposal for an inflation-busting 4.9 per cent increase in its annual budget, was more outspoken even than that of the shadow chancellor. He slammed the increase as “ill-judged and unwise”, and proposed instead that the Commission’s budget should be cut.

Of course, most people will feel that Mr Alexander was talking no more than common sense, and that the European Commission budget is already far too generous. To demand a further large increase (which will cost Britain alone approximately £680 million) from a continent in the grip of austerity shows an insensitivity that defies belief. But New Labour cheerfully sanctioned this kind of profligacy for 13 years while in power – think of Tony Blair’s move to give away large chunks of the Thatcher rebate, which has already cost us many billions.

It would be wrong – or at least premature – to brand Ed Miliband’s Labour as anti-European. He has not yet challenged, to give one example, the mass of job-destroying regulation which emanates every year from Brussels. Indeed, it is doubtful that his trade union backers would allow him to do so. Nevertheless, there is interesting movement. It is becoming increasingly common to hear criticism among backbenchers of one of the core European Union doctrines, the free movement of workers. Labour MPs are painfully aware that their own people are losing jobs as a result. Meanwhile John Healey, the party’s health spokesman, has become a thoughtful critic of European competition policy.

The passionate europhiles – Tony Blair, Peter Mandelson, Stephen Byers, Geoff Hoon – have vanished. In their absence, a shadow chancellor and a shadow foreign secretary have at last come together to condemn excessive spending. It is already safe to say that Ed Miliband’s Labour Party is considerably more Eurosceptic than at any time since that Delors speech in 1988.

The consequences for British politics are profound. For the past 20 years, the Conservatives have been the only major Eurosceptic party in Britain. This meant they felt so isolated that they were afraid to speak out – the main reason why David Cameron has gone out of his way to close down Europe as a subject of debate.

Now, thanks to Ed Miliband, both the big parties are Eurosceptic. Indeed, Balls and Alexander are egging on Osborne and William Hague towards open confrontation. The Chancellor knows that if he mounts a challenge to the Portuguese bail-out and the European Commission’s greed, Labour – as well as the Conservative backbenches – will be cheering him on. Only the Lib Dems retain their European ideals.

Indeed, last week, as part of their package of constitutional reform, they called for an additional 25 MEPs, in order to give the European parliament more “popular legitimacy”.

Just one final point. Had William Hague, 10 years ago, denounced EU spending in the same stern terms used by Douglas Alexander or Ed Balls, he would have been mocked as a demented Little Englander. It would be nice to have an apology, or even just an acknowledgment, that the Tories were right all along. Even so, Easter is a time for forgiveness and renewal. It’s nice to welcome Messrs Miliband, Balls and Alexander back to reality.